Tag Archives: utility-scale

Cooperative Energy and Origis Energy officially unveiled their joint venture 52-MW solar project in Lamar County, Miss., with elected officials and business leaders joining the two companies at a ribbon cutting. The facility began operation in December.

The 540-acre site, MS Solar 3, includes 206,000 polycrystalline solar panels which gather sunlight and transform it to energy that will power up to 11,400 homes. MS Solar 3 uses the best, most efficient solar technology available. Origis Energy built, owns and operates the facility while Hattiesburg-based Cooperative Energy has agreed to purchase all electricity the plant produces. Cooperative Energy is a not-for-profit, Member-owned generation and transmission cooperative that supplies electricity to 11 Member cooperatives that stretch from the Gulf Coast to the Tennessee line.

Cooperative Energy owns a diverse generation portfolio including coal, natural gas, nuclear and renewables. It began solar generation in 2016 with the start of five 100-kilowatt solar sites built at Members’ local headquarters. “This new, utility scale solar generator represents a giant step forward for Cooperative Energy in providing solar energy for our members,” said Jim Compton, Cooperative Energy’s president and CEO. “Not only is it one of the largest solar generation plants in Mississippi, it employs the most advanced solar technology available today.”

Origis Energy is helping to power the solar revolution with the construction of more than 100 operations worldwide. The company broke ground on the Sumrall facility in May 2017 and met its goal of production by year end.

“Solar energy benefits all stakeholders – the companies, the end users, the public and the regulators,” said Guy Vanderhaegen, Origis Energy’s CEO and president. “We firmly believe you will see more electrical utility companies seek to expand their portfolio by adding solar and partnering in projects such as this one. This area geographically benefits from an abundance of sunlight and we know it will be successful in reaching its generation goals.”

It’s been about a month since the #TrumpTariffs officially went into place, and while the long-term economic and pricing implications of the tariff remain to be seen, analysts at IBISWorld say procurement professionals shouldn’t panic since the market’s fundamentals remain favorable for buyers, at least in the short term. IBISWorld employs teams of dedicated expert analysts in the US, UK and Australia who scour economic, demographic and market data, while adding analytical insight that helps organizations of all types make better purchasing decisions. Here’s a look into their thinking.

Panel prices will still fall

While the tariff may place upward pressure on solar energy costs, PV panel prices are already falling, so the tax’s impact will be minimized. IBISWorld estimates that the average price of solar panels has been declining at an estimated annualized rate of 3.6% during the past three years, and is forecast to continue falling at an annualized rate of 3.3% in the next three years. While some of this decline is due to the availability of cheap imports, it’s also attributed to technological improvements and more cost-effective and scaled production. Consequently, though this price forecast may change, these factors will continue to keep PV panel prices in check, even as the tariff increases costs.

Moreover, in anticipation of the January decision, foreign suppliers, particularly from China and Mexico, rushed to bring in low-cost solar equipment for US customers toward the end of 2017 to beat the tariff. According to Bloomberg, there’s about five gigawatts of solar equipment already stashed in U.S. warehouses and ports, enough to supply U.S. solar projects for the next six months. This supply glut will help mitigate the impact of the tariff through much of 2018, when the tax will be the highest.

Mitigation through better procurement strategies

Businesses looking to install solar panels will also continue to enjoy tax incentives. Currently, the IRS offers a business investment tax credit equal to 30% of the cost of solar panel installation. Congress passed an extension on these tax credits in December 2015, which makes them available for solar energy systems in operation by the end of 2019. In 2020, the credit will be reduced to 26%, and then to 22% in 2021 before dropping permanently to 10% in 2022.

Procurement professionals can also take steps to insulate themselves from potentially higher prices by carefully considering their “soft costs.” These non-hardware expenses include financing, permitting, installation, taxes, inspection and more. Despite declining solar energy hardware costs, soft costs have largely held steady, and thus account for an increasing proportion of the price of solar power.

One of the best strategies for buyers to reduce soft costs is through scale. Many of these costs do not increase significantly with scale, which means buyers can spread these expenses out with large projects. Buyers should also look for vendors that offer standardized designs. These “plug-and-play” PV panel systems are modular and easy to install, enabling buyers to minimize permitting, inspection and connection costs by utilizing a standard system across all their locations.

Procurement departments can also look to build solar energy systems in states that have taken actions to reduce soft costs. For example, Colorado’s Fair Permit Act caps the fee for commercial permits at $1,000. Five New England states, including Massachusetts, Connecticut, New Hampshire, Vermont and Rhode Island, have joined forces to form the New England Solar Cost-Reduction Partnership. The partnership aims to reduce soft costs through measures such as online permitting and expedited review processes that automatically issue permits after a specified period of time.

Armed with a supply glut of imported PV panels, tax incentives and strategies for reducing soft costs, this tariff doesn’t have to be a death knell for businesses looking to adopt solar panel systems. In particular, the 30% tax credit in operation by the end of 2019 will continue to be a strong incentive for buyers considering solar panel systems.

The moment the tariff decision went into effect, our thought was to immediately find ways to bring system costs back in line with today’s expectations, even after accounting for this inflated module price. The Rocky Mountain Institute and 35 solar energy industry leaders apparently were way ahead of us, sending word about their commitment to develop an ultra-low-cost solar product able to operate in a variety of environments at fully installed costs as low as $0.50/Wp.

Participants at the Rocky Mountain Institute-hosted event, representing at least 15 gigawatts of solar capacity-equivalent to the capacity of 25 average-sized coal plants-identified an opportunity to reduce costs by $0.20/Wp in 2018 alone. Reducing costs at this scale would mitigate the effect of newly applied trade restrictions on solar components, keeping the solar energy industry on a maintained cost-reduction pathway.

The four-day workshop saw over 35 leading companies applying best practices in system design, supply chain, business model, finance, and market structures to the debate. Members identified a pathway to create a modular, pre-engineered and pre-assembled solar product of standardized design targeting a fully installed cost of ¢50/W and lower costs by as much as $0.20/Wp (dollars in watt peak) in 2018 alone, corresponding to about an 8%-percent reduction in the average national price of residential electricity.

In the last five years, the solar industry has realized year-over-year growth rates of 21%, attracted more than $100 billion in investment, and now employs more than 260,000 people in the U.S. as one of its fastest-growing energy sectors. Yet for solar to reach its full potential as a foundational, carbon-free energy source in the U.S. and around the world, it must compete without subsidy in wholesale markets.

“In addition to the benefit of a step-change in cost reduction, a more standard offering would be particularly effective in opening up new market segments of smaller installations, where the cost of project-by-project customization has diminishing returns,” said Thomas Koch Blank, Principal, Rocky Mountain Institute

Community-scale solar (CSS), also referred to as distribution-scale solar-installations of 1-10 MWp, cited close to load and connected to the distribution grid rather than the transmission grid-is emerging as a “sweet spot” for the build-out of solar energy development. In addition to low-cost electricity, CSS provides distributed benefits such as avoided transmission costs, reduced peak energy charges, potentially avoided capital expenditure for grid upgrades, ancillary services, and increased resilience.

Increased pre-assembly is going to have the ability to create jobs in the manufacturing sector and supply chain sector. Being able to communicate this as an integrated product offering, assembled in the U.S., that messaging is going to be important. There’s not enough emphasis on solar jobs being transferable skills for those being impacted by coal plant shutdowns. Many of these jobs have transferable skills that people can slide into pretty easily.

“By taking a whole-systems approach that leverages standardization to enable preassembly and pre-engineering, the roadmap to delivering a low-cost, easy-to-understand product offering is clear. Furthermore, regional preassembly of solar equipment and components, which get trucked to local sites for efficient installation, creates new jobs and community investment,” said Jules Kortenhorst, CEO, Rocky Mountain Institute

If you can’t beat ’em, acquire ’em. Shell is expanding its reach into renewable energy, signing an agreement to acquire a 43.83 percent interest in U.S. solar company Silicon Ranch Corp. from funds managed and/or advised by Partners Group. Consideration for the shares is between $193 and $217 million contingent on Silicon Ranch achieving predetermined milestones. A separate agreement with Silicon Ranch will give Shell the possibility to increase its ownership after 2021. Subject to regulatory approvals, the transaction is expected to close in Q1 2018.

“Partnering with Silicon Ranch Corporation progresses our New Energies strategy and provides our U.S. customers with additional solar renewable options,” said Marc van Gerven, Shell Vice President of Solar. “With this entry into the fast-growing solar sec-tor, Shell is able to leverage its expertise as one of the top three wholesale power sellers in the U.S, while expanding its global New Energies footprint.”

This investment is part of Shell’s New Energies power portfolio, which prioritizes low carbon generation and storage. Shell’s interest in Silicon Ranch includes an existing portfolio of approximately 880 megawatts of projects in operation or contracted.

Who is Silicon Ranch? Based in Nashville, it specializes in full service development of commercial and utility-scale projects, building over 2.5 gigawatts of conventional and renewable generation assets, including the first large-scale solar projects in Tennessee, Georgia, Arkansas, and Mississippi.

Backed by an ongoing $1 billion investment, Dominion Energy has grown its solar fleet in Virginia and North Carolina over the last two years from near zero to approximately 1,350 MW in service, in construction or under development. That is enough clean energy to power nearly 340,000 homes during peak sunshine.

Dominion Energy’s solar fleet is ranked the sixth largest among owners of U.S. electric utilities, and according to the Solar Energy Industries Association, Virginia also is sixth in climbing the state rankings for solar energy.

“It’s not just about Dominion Energy meeting its clean energy goals, it’s also about helping our customers achieve theirs,” said Paul Koonce, president and CEO of Dominion Energy’s Power Generation Group. “We have a responsibility to offer the right programs, resources and solutions so our customers can make smart decisions about their energy future, and the key is we’re doing it together.”

What’s next? Dominion Energy’s long-term energy forecast calls for another 5.2 GW of new solar generation in the next 25 years, enough to power 1.3 million homes at peak output.

Virginia

• There are 27 solar generating facilities on 4,683 acres, which equates to about 444 MW of solar capacity either in operation or under development in the Commonwealth.

• The construction of another 300 MW of solar is planned to support Facebook’s eighth data center in the U.S., to be located in Henrico County.

• As part of its Solar Partnership Program, company-owned rooftop or ground-mounted solar arrays are installed on leased commercial properties, such as Philip Morris, Capital One, Prologis, Canon, Merck and various educational institutions.

• Large-scale solar facilities up to 100 MW in size are sprinkled across the state and are done in partnership with the Commonwealth of Virginia, the U.S. Navy, University of Virginia, Microsoft and Amazon.

• Residential customers are participating in a private solar pro-gram that allows them to offset their energy usage with their own rooftop solar generating system.

North Carolina

• There are 13 projects totaling 353 MW that Dominion Energy has brought or is bringing online in North Carolina by 2019. Additionally, there are 82 projects owned by third-party developers that are operating or being developed totaling 550 MW.

“More and more companies have set their own goals for renewable energy and we will back them,” Koonce said. “Our programs are intended to meet their needs and help strengthen Virginia’s reputation as the ideal place to do business.”

Dominion Energy is seeking State Corporation Commission approval for a 100 percent renewable energy option for residential and small commercial and industrial custom-ers, as well as an option for business customers to purchase renewable generation equal to a specific portion of their energy usage. In addition, once approved, the Community Solar Pilot Program will enable customers in Virginia to voluntarily pur-chase renewable energy from locally-sited solar installations to meet a portion of their needs.